Embattled hotelier Bill Yung III is giving up more control of his bankrupt gaming company, Tropicana Entertainment, and is considering moving its headquarters to Las Vegas.
The privately held company, which is a subsidiary of Yung’s hotel company Columbia Sussex Corp., is now based in Crestview Hills, Ky. Tropicana Entertainment owns 11 casino properties in the United States and the Caribbean including the Tropicana on the Strip and The Westin.
Late Friday, the company named its current president, Scott Butera, chief executive officer and said it had formed a five-member board of directors.
Yung, who owns the company, had controlled Tropicana Entertainment’s operations as its sole board member and CEO.
“This is part of our recapitalization plan as Tropicana Entertainment is taking steps to be a stand-alone entity both financially and operationally,” said Butera, who was also named as one of the company’s new directors.
Yung will be one of the board’s members, although it is uncertain now whether he will remain chairman. The board will meet in the next few weeks and elect a chairman.
The other board members are restructuring banker Thomas Benninger, former Metro-Goldwyn-Mayer Studios Chief Financial Officer Michael Corrigan, and former New Jersey Casino Control Commission Chairman and CEO Bradford Smith.
The move comes a month after the company filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware.
Tropicana Entertainment has been working to restructure part of its nearly $3 billion debt load, which stems largely from its $2.1 billion buyout of Aztar Corp. in January 2007. Financial problems began after the company lost its license to operate the Tropicana Atlantic City and the economy slumped.
“Anything that demonstrates serious organizational change is a favorable perception,” Deutsche Bank gaming analyst Bill Lerner said Friday evening after hearing of the company’s plans. “(That) is important with customers, regulators and financial constituents.”
The new board is expected to form independent audit, litigation and gaming regulatory compliance committees.
Butera, a former banker who joined Tropicana Entertainment in late March, said the executive shuffle and the naming of the board have been discussed since the company ran into financial trouble.
“We want to maximize value for all of our (debt holders) including Mr. Yung,” Butera said. “It’s important that Tropicana stands alone.”
Butera denied the corporate moves were part of a plan to position the company for sale. He said the steps should help the company get its financing in shape so it can invest in its properties, he said.
The moving of the company’s offices to Las Vegas, where Butera is already based, could come in the next few months.
“Obviously, Las Vegas is a very important asset to this company,” he said. “Our future hinges, ultimately, on our success in Las Vegas. Las Vegas is a very prominent piece in the company.”
Contact reporter Arnold M. Knightly at email@example.com or 702-477-3893.